Blockchain technology has shaken up the financial world by providing a system for transactions that does not need a central authority, bank or third party payment system.This very reason has made many traditional financial institutions unsupportive of the new technology, as over time it could make their systems obsolete.

Enter Mastercard, the global banking card provider. The company has been somewhat bipolar in their stance towards cryptocurrencies and Blockchain technology over the past few years. The card provider has held virtual currencies at a distance and CEO Ajay Banga took a stern stance in 2017, labelling cryptocurrencies as ‘junk’ in October.

Banga is adamant that digital currencies need to be issued by governments before his company provides any support. As he told the India Times, “non-government mandated currency is junk.”

Alongside the likes of Visa, Mastercard have maintained this skeptical approach to Bitcoin and other cryptocurrencies from as early as 2014. A video produced by Mastercard, narrated by South East Asia CEO Matthew Driver, hammered on about a lack of trust and transparency with cryptocurrencies:

“If its an anonymous transaction, that sounds like a suspicious transaction, why does somebody need to be anonymous?”

Driver’s statements centred around the perception that cryptocurrencies were used for nefarious purposes given the anonymity of encrypted, peer-to-peer transactions provided by various cryptocurrency Blockchains.

That particular video makes no attempt to explain the value of distributed ledger technology (DLT) or cryptocurrencies and effectively suggests that anyone using virtual currencies to make transaction are trying to hide their tracks, for whatever reason.

Nevertheless, the promotional material was just that, an advert to promote Mastercard’s services while trying to discredit Bitcoin and cryptocurrencies, which were starting to gain popularity at the time.

Echoing Driver’s words from their 2012 advert, Sarker denounced the support of anonymous cryptocurrency - only state-issued virtual currencies will be considered:

“So long as it’s backed by a regulator and the value … it is not anonymous, it is meeting all the regulatory requirements, I think that would be of greater interest for us to explore.”

While Mastercard steer clear of Bitcoin and cryptocurrencies, they’ve been slogging away developing their own DLT-based offerings of the past 12 months. All in all, it’s believed that Mastercard Labs have filed over 30 patents for Blockchain and cryptocurrency related projects.

Blockchain powered B2B and instant

In November 2017, Mastercard filed a patent for a Blockchain-based payment system. It promises to deliver instantaneous to merchants, fast-tracking the cumbersome verification of payments from customers to card issuers which can take days to process.

As Accenture estimated in January 2017, banks could save up to 30 percent on infrastructure costs if they adopt Blockchain technology. It’s probable these cost savings are a driving factor behind Mastercard’s aggressive moves to adopt and implement Blockchain solutions to several parts of its business.

ID and credential verification

This is again evident in Mastercard’s most recent patent filed in the United States, published on April 12. The company laid out plans to launch a system for identity and credential protection and verification powered by Blockchain technology.

It is a solution that intends to prevent fabrication of proof of identity and credentials - by storing identification and credentials data in an immutable database. The details are outlined here, but it is essentially a semi-private ledger solution that will only allow authorised nodes to submit and update this type of data.

Bitcoin pilot program in Japan

While Mastercard has firmly opposed Bitcoin as currency, Sarker also told the Financial Times that the company was running a Bitcoin pilot program in Japan.

The program allows Bitcoin holders to cash out onto a Mastercard - using Know Your Customer and Anti-Money Laundering components. Even so, Sarker made it clear that it was not a trading operation on the Mastercard network.

He also said they’re dipping a ‘toe in the water’ and were ‘cognisant of the reputational risk’. Ironically, a lot of Mastercard customers could well be interested in such a service.

Baying for Blockchain

Furthermore, Mastercard seem to be scrambling to hire the best Blockchain minds in the business to continue the development of their payment processing.

On April 12 Irish Tech News reported that Mastercard has 175 new positions to fill at its Dublin offices. Among the news roles, Mastercard are looking for Blockchain specialists, software engineers, data scientists, cloud infrastructure specialists and information security specialists. All of these new positions form the makings of a Blockchain development team.